Rents hit record February high in Manhattan and Brooklyn
- The median rent in Manhattan hit $4,290 last month while Brooklyn’s median rent stood at $3,499
- Bidding wars for apartments increased in Manhattan, Brooklyn, and Northwest Queens compared to February 2023
Renters signed more new leases, and saw more bidding wars, in February than in the same month a year ago.
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Renters who hoped to find a New York City apartment at a discount this spring encountered record-high February rents, according to the latest Douglas Elliman market report.
The median rent in Manhattan and Brooklyn hit their highest levels on record for the month of February. In Manhattan, the median rent reached $4,290 last month in a two percent increase from January, while Brooklyn's median rent remained roughly flat at $3,499 compared to the month prior, according to the report.
The growth in median rent is likely due to higher mortgage rates, which have made it more difficult for would-be buyers to purchase an apartment rather than rent, says Jonathan Miller, president of appraisal firm Miller Samuel and author of the report.
“The rental market has gotten tighter because mortgage rates have not dropped as much as expected,” Miller says.
Small apartments, big bidding wars
Rents typically dip in the winter months, but February’s “unexpected” increase instead came with a surge in bidding wars in Manhattan, Brooklyn, and Northwest Queens, according to the report.
Renters paid more than a landlord’s asking price in 19.2 percent of deals in Manhattan in February, up from 18.4 percent the year before. In Brooklyn, renters paid over asking in 25.3 percent of leases, up from 25.3 percent in February 2023.
Bidding wars were most pronounced for small apartments in Manhattan, where renters paid over asking in 24.1 percent of studio leases.
“It’s definitely tighter in the starter apartments than the larger apartments,” Miller says.
More leases, listings, and competition
February’s higher-than-usual rents didn’t deter renters from signing on the dotted line.
The number of new residential leases spiked in Manhattan, rising 7.7 percent to 4,349 new leases in February compared to a year prior. Meanwhile, Brooklyn saw a 62.2 percent increase in new leases signed over that same period, to 2,498 leases.
Listing inventory also rose in Manhattan, by 33.1 percent, and in Brooklyn, by 6.3 percent, in February compared to February 2023. But the increase wasn’t enough to offset higher rents.
“At the moment, the escalation in listing inventory does not seem to be adequate to stem the rise in rents,” Miller says.
What’s next for the rental market?
If the Federal Reserve does cut interest rates later this year, mortgage rates could drop and encourage more buyers to own, rather than rent.
“It's anticipated that mortgage rates will fall in the back half of this year,” Miller says. “If that does happen as expected, the trend will change.”
But at the same time, rents traditionally rise in March throughout the summer, so New Yorkers looking to rent in the coming months might have a harder time finding a deal.
